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Manhattan US Attorney Announces $2.75 Million Settlement with NYC Dermatologist for Medicare Fraud

11 June 2010 –
PREET BHARARA, the United States Attorney for the
Southern District of New York, ANDREW CUOMO, the Attorney General
of the State of New York, and THOMAS ODONNELL, the Special Agent
in Charge of the New York Office of Investigations for the Office
of Inspector General, U.S. Department of Health and Human
Services, announced today a settlement between the United States
and LAWRENCE D. JAEGER, D.O., of Community Medical and
Dermatology Center and Advanced Dermatology of New York,
resolving a whistleblower lawsuit that alleged JAEGER submitted
false claims to Medicare and the New York Medicaid program. The
settlement, approved late yesterday in Manhattan federal court by
United States District Judge PAUL A. CROTTY, requires JAEGER to
pay to the United States and the State of New York a total of
$2.75 million in civil damages under the False Claims Act.
According to the documents filed in Manhattan federal
court:
JAEGER is a Doctor of Osteopathic medicine who provides
dermatological services to Medicare and Medicaid patients in the
Bronx and Manhattan. JAEGER made false representations to the
New York State Department of Health in order to obtain a
certification for his practice, Community Medical and Dermatology
Center (“CMDC”), which would earn him a higher Medicaid
reimbursement rate. Based on the fraudulently-obtained
certification, JAEGER was able to increase CMDC’s Medicaid
reimbursement rate from $30 to $150.
To obtain the certification, JAEGER falsely represented
that the majority of CMDC’s services would be primary care
services. Approval of CMDC’s certification was based on this
representation. In truth and in fact, however, during the time
JAEGER operated CMDC as an Article 28 facility, it was almost
-2-
exclusively a dermatology center and performed only a negligible
number of primary care services.
JAEGER also submitted false claims to Medicare for
services carrying higher reimbursement rates than those he
actually provided.
JAEGER has agreed to pay $2.75 million to resolve these
claims, representing $2,674,000 under federal and state Medicaid
claims and $76,000 under federal Medicare claims.
* * *
The allegations of fraud were first brought to the
attention of the Government by a whistle-blower, who filed a
lawsuit under the qui tam provisions of the False Claims Act.
The False Claims Act permits the United States to intervene in
cases originally commenced by private parties who have knowledge
of fraud committed against the Government.
Mr. BHARARA praised the New York State Office of the
Attorney General, the Office of Inspector General, U.S.
Department of Health and Human Services, and the New York State
Office of the Medicaid Inspector General for their work on this
case.
“Healthcare fraud drains the system of billions of
dollars of hard-earned taxpayer money,” said SDNY U.S. Attorney
PREET BHARARA. “Doctors are supposed to treat patients, not
defraud the public. The Southern District of New York will
continue to work with our state and federal law enforcement
partners to aggressively enforce the laws prohibiting healthcare
fraud.”
“If you promise to deliver services to the neediest New
Yorkers and then fleece taxpayers through lies and deceit, there
will be very real consequences,” said Attorney General ANDREW
CUOMO. “This settlement underscores that abuse of the Medicaid
program will not be tolerated.”
“The Office of Inspector General will continue
aggressively investigating Medicare fraud committed by
individuals and companies alike,” said THOMAS ODONNELL, the
Special Agent in Charge of the New York Office of Investigations
for the Office of Inspector General, U.S. Department of Health
and Human Services. “This successful provider investigation
reflects our continued resolve to protect vulnerable Medicare and
Medicaid populations, as well as the Nation’s taxpayers.”

For more information on the Department of Justice’s
efforts to fight Medicare fraud, go to:
www.stopmedicarefraud.gov.
This case is being handled by the Southern District of
New York’s newly formed Civil Frauds Unit, working together with
the Medicaid Fraud Control Unit of the New York State Office of
the Attorney General. Assistant United States Attorney KATHLEEN
A. ZEBROWSKI is in charge of the case.
10-185 ###

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